Wardle v Credit Agricole Corporate and Investment Bank
| Jurisdiction | England & Wales |
| Judge | Lord Justice Elias,Lady Justice Smith,The Master of the Rolls |
| Judgment Date | 01 July 2011 |
| Neutral Citation | [2011] EWCA Civ 545,[2011] EWCA Civ 770 |
| Docket Number | Case No: A2/2010/1905/EATRF |
| Court | Court of Appeal (Civil Division) |
| Date | 01 July 2011 |
[2011] EWCA Civ 545
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM the EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE KEITH sitting with lay members
UKEAT/0535/09 AND UKEAT/0536/09, BAILII: [2010] UKEAT 0535_09_1407
Royal Courts of Justice
Strand, London, WC2A 2LL
The Master of the Rolls
Lady Justice Smith
and
Lord Justice Elias
Case No: A2/2010/1905/EATRF
Mr Simon Cheetham and Ms Amy Stroud (instructed by Messrs Pritchard Englefield) for the Appellant
Mr Christopher Jeans QC and Mr Paul Nicholls (instructed by Messrs Osborne Clarke) for the Respondent
Hearing date: 12 April 2011
This case raises a number of issues concerning the calculation of compensation by an employment tribunal. The appellant, Mr Wardle, (hereinafter referred to as "the claimant" as he was before the Employment Tribunal) was found to have been unfairly dismissed, the dismissal being an act of victimisation by the respondent (hereinafter "Calyon") because the claimant had taken proceedings for nationality discrimination. In addition, the claimant was found to have been refused promotion prior to his dismissal by reason of his nationality. Liability is not challenged. The only question is whether the Tribunal properly assessed the compensation flowing from these unlawful acts. Both parties submitted before the Employment Appeal Tribunal ("EAT") that in certain, albeit different, respects it did not, and the EAT (Keith J presiding) accepted some but not all of these challenges. Both parties now contend that the EAT in turn erred in various ways.
The issues before us now fall into two categories. The first relates to the compensation awarded by way of statutory uplift. Section 31(3) of the Employment Act 2002 (which is no longer in force but was at the relevant time) obliges an employment tribunal, where it finds that the employer has acted in breach of certain statutory procedures for handling dismissals or grievances, to increase the compensation otherwise payable to reflect that fact. The second category of issues relates to the calculation of future loss. There are a number of detailed points which the parties have raised with respect to the way in which the Employment Tribunal, and subsequently the EAT, assessed that loss.
The background.
The claimant was employed by Calyon in a post with the interesting designation of Global Head of Exotic Interest Rate Derivatives Risk Management. He applied to be promoted to Head of Risks Management but the application failed and a French national obtained the post. Had the claimant been promoted, the new job would have taken effect from January 2008. The rejection of his application for promotion was held to be an act of discrimination on the grounds of nationality, which contravenes the Race Relations Act 1976. The claimant was subsequently dismissed with effect from 31 July 2008. The Tribunal held that this dismissal was both unfair and an act of victimisation discrimination under the 1976 Act in that the reason for dismissal was a protected act, namely the fact that he had commenced the promotion proceedings in the Tribunal alleging discrimination under that Act.
In its judgment on remedy, the Employment Tribunal made certain findings which informed its assessment of compensation. The material findings were as follows:
i) The claimant's salary at the time of his dismissal was £104,000.
ii) If he had been promoted to Head of IRD Risk Management his salary would have increased from £104,000 to £120,000.
iii) In that role he would have received a bonus in each of the years 2009 and 2010 of 70% of his salary. (No express finding was made with respect to later years.)
iv) The claimant secured employment with the Financial Services Authority (FSA) on 3 rd November 2008 at a salary of £105,000 (paragraph 26). The FSA would also pay a bonus in that year and thereafter but only of 20% of salary.
v) This job involved a significant reduction both when compared with what he was earning and what he would have earned had he not been denied his promotion. However, the Tribunal found that the FSA job qualified him well for a return to banking. The Tribunal said this (para 29):
'The Claimant was recruited as part of the FSA's drive to recruit experienced and talented people from the private sector at higher salaries than were normally paid in the public sector. Although his title is Associate, it was quite clear when he described to us the details of the job he carries out that it is a job at a fairly high level. He acts as a consultant and goes into banks and reviews their risk operations. He assesses their risk practices and whether they have adequate capital and does stress testing. He has meetings with Chief Risk Officers in the large banks and has first hand experience of seeing how things work at the board level. He has experience of and insight into the relationship between the Bank of England and the FSA. The Claimant is diligent and ambitious and we have no doubt that he will quickly learn and master his new role and that he will do well in it. The experience he will gain and the contacts that he will make from his job will stand him in good stead should he decide to go back into a career with a bank in a market risk / regulatory role. With increased regulatory drives, a risk manager who has regulatory experience as well is likely to be in demand.'
vi) The Tribunal then made certain findings on two matters which figure significantly in this appeal. The first was what would have happened to the claimant had he not been dismissed. The Tribunal noted that the claimant's previous working history showed that in the previous 15 years he had worked for four different employers and that the longest he had stayed with any single employer was five years. It observed that the banking crisis of late 2008 was likely to be resolved by an improvement in market conditions, and that the claimant still had contact with head hunters. In the light of these factors it found that there was:
"a very strong chance, which we put as high as 80%, that the Claimant would have left the Respondent's employment at the beginning of April 2010, having collected his loyalty premiums."
vii) The second concerned the likelihood of the Claimant leaving the FSA and returning to his banking career. The Tribunal's analysis of this reflected much of what it had already said about the prospects of going back into banking (para 36). This is an important paragraph in this appeal and I set it out:
"We next considered the likelihood of the Claimant leaving the FSA and returning to a better paid role in banking. The Claimant has worked for 20 years (the greater part of his working life) in banks, and appears to have had little difficulty in finding new jobs and moving from one bank to another. He had a successful career in trading and risk management. The only reason that he had difficulty in finding a job in banking in late 2008 was because of the extraordinary circumstances that prevailed at that time in the financial services sector. We accept that the Claimant will remain at the FSA for some time so that he can derive the full benefits of learning new skills and gaining experience as a regulator. Having done so, he will be well equipped to return to a risk management/regulatory role in banking. As we have said before, the indications are that in the future regulatory work and risk management will pay a larger part in the role of banks. The Claimant, having had experience of both risk management and regulatory procedures and controls from within the FSA, will be in a good position to seek a high level post within the banking sector. He is also in his current role in a good position to make useful contacts with senior risk officers and managers in banks. The Claimant is diligent and ambitious and will not resign himself to a post where his earnings are lower if there is a potential for him to move into better paid work. Having carefully considered all the evidence it is our conclusion that after the Claimant has been with the FSA for about a period of three years, i.e. at the end of 2011, there is a 70% chance that he will return to banking and be able to secure employment in banking that will pay at the same salary level as he enjoyed before. We took into account that the Claimant will be aged 47 at that time."
I refer hereafter to a job in banking at the same salary level as the claimant would have enjoyed if promoted as "equivalent employment".
viii) The Tribunal then considered whether Calyon had complied with the statutory procedural obligations imposed upon them, both with respect to a grievance raised by the claimant when he was not promoted, and when he was dismissed. The Tribunal held that the grievance had been dealt with in accordance with the relevant procedures, albeit somewhat ineptly, but that there had been a fundamental failure to comply with the dismissal procedure. As to the latter, the Tribunal said this (para 40):
"We next considered whether we should uplift any award of compensation for the dismissal on the ground that the statutory dismissal and disciplinary procedure had not been completed. The statutory procedure requires the employer to inform the employee in writing of the grounds that have led the employer to contemplate dismissing the employee, to inform him of the basis for those grounds, and then when the employee has had reasonable time to consider that information to hold a meeting with him to discuss the matter and thereafter to make a decision on whether to dismiss the employee. In the present case, the Claimant was suddenly called into a meeting and was told that he was being dismissed immediately. There was no step one letter and no step two meeting to discuss matters before reaching a decision. The...
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